Embedding Stand-Alone, ‘Local Buzz’ and ‘Global Pipeline’ Firms; a Plea for a Less Traditional Regional Innovation Policy

This paper deals with the policy implications of a research project based on a non-traditional approach to innovation measurement in a Dutch region. This region is characterized by an ‘innovation paradox’, as it lodges large numbers of ‘creative’ people while it also underperforms in traditional innovation measurements. A survey among experts regarding regional innovation yields large numbers of innovative firms in a wide range of industries, which in traditional studies would partly go unnoticed. Further data analysis reveals that innovation in the region has no clear face in terms of firms and sectors. This is due to the embroynic state of clustering in different subsectors, the mostly social and informal nature of network ties between entrepreneurs in the region, the international level at which much innovation-oriented networking takes place, and the lack of connectivity between the latter networks and local informal networks and the embryonic clusters. In terms of their innovation profile, firms in the region are strong in creative, non-technical and combined forms of innovation. So, dynamic capabilities especially show up ‘downstream’, connecting novelty with clients and markets, and translating this into change management and new practices. Next, we found that firms strategically engage in innovation ventures, in the three ways that were explained before by Bathelt et al. (2004), i.e. seeking and combining international knowledge with one’s own (constructing ‘global pipelines’), strengthening regional ties, identity, contact and linkages (‘local buzz’), and relying on one’s own resources for innovation (‘stand alone’ strategy). One challenge for policy is to exploit these three strategies of firms. Such can be done in three ways. One is to use the abundant social capital in the region, with a view to strengthening the economic relevance of existing local networks by constructing and extending ‘global pipelines’. The second is to display leadership and formulate a ‘community argument’ for innovation (dealing with the following sub questions: why must I innovate, why must I interact in networks and clusters, and why should I do so at different spatial scales?), thus strategically reorienting the available ‘local buzz’ and enhancing its economic relevance. Together, these two proposals serve the purpose of stimulating knowledge flows ‘outside-in’ and ‘inside-out’ (cf. Wolfe & Gertler 2005). The third is to correct for the policy myopia on cluster and network initiatives. The price we pay for the Porterian approach to clustering (cf. Martin & Sunley 2003; Hospers 2005) is that a significant number of firms in the region under review that individually engage in innovation processes, are not part of ‘global pipeline’ and ‘local buzz’ processes. Hence, they do not enrich nor benefit from these processes, and may thus relatively easy leave the region. Finally, they may be less effective in innovation, in terms of speed and the market fit of new products and processes. So, both from a regional and firm-level perspective, stand-alone firms merit attention.

Beyond clusters: Fostering innovation through a differentiated and combined network approach

Over the past decades, economic and innovation policy across Europe moved in the direction of creating regional clusters of related firms and institutions. Creating clusters through public policy is risky, complex and costly, however. Moreover, it is not necessary to rely on clusters to stimulate innovation. A differentiated and combined network approach to enhancing innovation and stimulating economic growth may be more efficient and effective, especially though not exclusively in regions lacking clusters. The challenge of such a policy is to mitigate the bottlenecks associated with ‘global pipeline’, ‘local buzz’ and ‘stand alone’ strategies used by innovative firms (cf. Bathelt et al. 2004; Atzema & Visser 2005b), and to combine these strategies with a view to their complementarity in terms of knowledge effects. Private and semi-public brokers will be key in the evolving policy, as timely organizational change is crucial for continued innovation, while brokers also need to mitigate governance problems. This requires region-specific knowledge in terms of sectors, life cycles, institutional and socio-cultural factors, and yields spatially differentiated and differentiating adjustment strategies. The role of public policy is to assist in recruiting, provide start-up funding and monitor brokers. With this, policy moves towards a decentralized, process-based, region-specific, spatially diverging and multi-level system of innovation that is geared towards the evolving innovation strategies of firms.innovation policy, clusters, networks, governance, regionalization

Kinsey Dialogue Series #3: Landscaping the Learning Environment to Create a Home for the Complex Mind

I am going to use the opportunity presented by the 2001 David Kinsey Lecture to bring together some of the ideas expressed in my recent work, and to reflect on my decades-long experience in creating the conditions for the development of learning in an international context that experience, and my reflections on it, has led me to recognize that learning is an immensely more complex phenomenon than most of our current practice to promote and facilitate it would have us believe. Consequently, I have come to the conclusion that the complex human mind is poorly at home in much of the environment supposedly created to nurture it. Neglect of the essential conditions for its sustenance and growth has led the mind to lose its natural habitat, putting it at risk of becoming extinct. My emphasis will therefor be on what should be done to landscape the learning environment in such a way that the complex mind can find a home in it. I shall develop my ideas and raise questions about this issue, while calling attention to a number of key concepts

Landscaping the Learning Environment to Create a Home for the Complex Mind

I am going to use the opportunity presented by the 2001 David Kinsey lecture to bring together some ideas expressed in m recent work and to reflect on my decades-long experience in creating the conditions for the development of learning in an international context. That experience, and my reflections on it, has led me to recognize that learning is an immensely more complex phenomenon than most of our current practice to promote and facilitate it would have us believe. Consequently, I have come to the conclusion that the complex human mind is poorly at home in much of the environment supposedly created to nurture it. Neglect of the essential conditions for its sustenance and growth has led the mind to lose its natural habitat, putting it at risk of becoming extinct. My emphasis will therefore be on what should be done to landscape the learning environment in such a way that the complex mind can find a home in it. I shall develop my ideas and raise questions about this issue, while calling attention to a number of key concepts

Hard Real-Time Networking on Firewire

This paper investigates the possibility of using standard, low-cost, widely used FireWire as a new generation fieldbus medium for real-time distributed control applications. A real-time software subsystem, RT-FireWire was designed that can, in combination with Linux-based real-time operating system, provide hard real-time communication over FireWire. In addition, a high-level module that can emulate Ethernet over RT-FireWire was implemented. This additional module enables existing IP-based real-time communication frameworks to work on top of FireWire. The real-time behavior of RT-FireWire was demonstrated with a simple control setup. Furthermore, an outlook of the future development on RT-FireWire is given

Transaction costs, logistics and the spatial-functional dynamics of supply chains

Whether one takes a manufacturing, logistics or supply chain perspective, three trends appear to drive on continuous and substantial change in the business world. Firstly, the long-term trend in economic policy-making is one of liberalising and deregulating markets as well as privatising state-owned operations, enabling the internationalisation of economies and firms. Secondly, the long-term trend in consumer markets is one of more diversity, change and complexity of products ('mass customisation') along with the globalisation of markets (enhancing the importance of 'global brands'). Thirdly, technological development in the areas of transport, information and communication allow for increased flexibility and specialisation in production logistics and supply chains. This paper discerns several interrelated patterns of strategic adjustment of firms to the above trends in the general business environment. One is to focus on core competences. Businesses specialise in a limited set of operations where their core skills lie, outcontracting those beyond. Inter-firm division of labour in a network context has thus become a major pathway to enhanced productivity and innovation. Supply chains can be conceived as vertical networks of manufacturing, logistics and retail businesses. Here, three additional patterns of change can be observed: the reversal, integration and glocalisation of supply chains. Postponed manufacturing, EDCs and e-logistics are expressions of these patterns. However, the available empirical evidence on postponement applications in Northwest Europe and the Dutch logistics sector suggests that adjustment falls short of expectations. In this paper, we formulate the hypothesis that the observed patterns of adjustment in logistics and supply chains can be explained by looking at three cost types and related constraints that firms face in the adjustment process. These are - the costs of transforming raw materials into final products: the so-called 'transformation' (or production) costs; - the costs of bridging time and space barriers: 'logistics costs'; and - the costs of transfering ownership in market transactions or coordinating an inter-firm division of labour and managing risks (of relying on specialised partners) in a business network context: the so-called 'transaction costs' % cf. Coase and Williamson). Transformation and logistics costs are subject to optimalisation trade-offs; these are taken into account in current theorising on logistics and supply chain developments. Transaction costs, however, are to be reduced by designing adequate 'governance structures' (static perspective), or by relying on various trust-building mechanisms that allow for inter-firm division of labour to proceed across the transformation/logistics interface (dynamic perspective). Clearly, this last influences the location decisions of firms and the prospects for regional development. For a more recent version of this article see Visser, E.J., and Lambooy, J.G. 2005. A dynamic transaction cost perspective on fourth party logistic service development. Geographische Zeitschrift 92 (1+2): 5-2